Published on Liberal Democrat Voice

 By Cara Jenkinson | Mon 20th October 2014 – 2:06 pm

In the flurry of press coverage over recent UKIP success, the steady rise of the Greens is usually ignored (including by the broadcast media who are excluding them from the pre-election debates).

The Greens have taken the left-wing protest vote which of course we used to get.  On the doorsteps in Hornsey and Wood Green, disillusionment with politics is clear to see – not because of immigration or Europe, but because the burdens of austerity are not seen to be shared equally.  One of the main sources of outrage is tax avoidance.  Major corporations are still paying minimal amounts of tax, and this means that the Exchequer is getting many billions less than it should be.  Local government spending continues to be cut, public sector pay continues to be almost flat, and the pressure on benefits for those of working age remains.

The Conservatives have made considerable noise on the subject of tax avoidance.  But as of 2013, the UK’s top 100 companies still had over 8000 subsidiaries in onshore or offshore tax havens, and the ‘tax efficiency’ industry continues to flourish.  The lobbying by large corporate donors to the Conservative party means that although some of the more outrageous tax avoidance schemes have been shut down there remains a huge discrepancy between the profits made and the tax paid by many companies. There is some good news on a proposed ‘Google tax’ which aims to clamp down on companies shifting profits between different countries; however the danger is that it will be significantly watered down after the big corporates have had their say, in the way that the new General Anti Abuse Rule (GAAR) has been.

Tackling tax avoidance and should sit naturally with Lib Dem values.  Our independence from vested corporate interests should enable us to do the right thing.  There have been good words from Danny Alexander, as well as some good deeds – there are more HMRC staff tackling tax avoidance, and some loopholes have been stopped.  But we need to be doing more.  The General Anti-Abuse Rule needs to be strengthened including hefty fines for those found to be avoiding tax, and for any professional firms who have provided advice leading to tax avoidance.  More action is needed on tax havens, particularly clamping down on the secrecy rules that prevent developing countries see where multinationals are transferring their profits. And policy to tackle tax avoidance needs to figure as a top priority in our manifesto.

Much was made in our recent Conference of the extra £1billion that we will give to the NHS.  But if serious inroads to tax avoidance are made the reward could be multiple billions to spend on services.  And voters may become just a bit less disillusioned.

* Cara Jenkinson is Chair of Haringey Liberal Democrats